With Donald Trump securing another term in office, analysts predict that Zimbabwe will face a significant decline in gold earnings as global economic dynamics shift due to Trump’s business-oriented policies. These changes are expected to impact demand for gold, traditionally viewed as a safe haven asset.
By Ryan Chigoche
Trump’s policies are anticipated to prioritize strengthening the US dollar and reducing global tensions, particularly in regions like the Middle East and Eastern Europe. As a result, the demand for gold, which often rises during geopolitical instability, is likely to decrease.
Over the past few years, gold prices have surged, reaching record highs, particularly due to geopolitical crises such as the Russia-Ukraine conflict. However, gold prices have recently experienced a downturn.
However this week, prices dipped to a one-month low, with investors cautious ahead of upcoming US economic data and potential Federal Reserve commentary on inflation. As of November 12, gold was trading near $2,646.83, having fallen from higher levels earlier in the month. If prices breach this crucial support level, further declines could follow, with the next target around $2,604.39.
Financial analyst and Head of Research at Morgan and Co, Tafara Mtutu, highlighted that Zimbabwe must prepare for reduced gold earnings in 2025 due to the anticipated strengthening of the US dollar and the de-escalation of global tensions under Trump’s leadership.
“So with Trump winning the election, the sentiment is that Trump is more business-oriented than he’s focused on politics, so he’s going to push for a stronger US dollar compared to other currencies. He’s going to try and de-escalate global tensions in Israel, Iran, and also in Russia and Ukraine,” Mtutu explained.
He continued, “With the sole purpose of global economic stability and also lowering the price of oil, we should see benefits for businesses in the US and globally. But, the removal of these geopolitical risks, which had kept gold prices elevated due to crises like COVID-19, the Russia-Ukraine conflict, and tensions in Israel and Iran, will likely push down gold prices.”
“Once these risks are de-escalated, we are likely to see a fall in gold prices. This will have a negative impact on Zimbabwe’s gold sector, leading to a decline in revenue and earnings from 2025 onward.”
Despite the challenges, Mtutu pointed out a potential upside: lower oil prices. As global tensions ease, fuel prices are expected to fall, which would reduce the cost of alternative energy sources, such as generators, that Zimbabwe’s mining sector heavily relies on.
“The positive side will be lower oil prices, which will translate to reduced fuel costs. Given that Zimbabwe is a country that depends heavily on alternative energy sources for mining, this will act as a cushion to offset the negative impact of lower gold prices,” Mtutu added.
For Zimbabwe’s gold sector, which is a major contributor to export revenues, the timing of this price slump is especially problematic. Fidelity Printers and Refiners (FPR), the country’s central gold buyer, has played a critical role in stabilizing the sector by offering competitive prices to small-scale miners. However, the ongoing global price decline threatens to undermine FPR’s ability to maintain these rates, potentially leading to a reduction in gold deliveries from miners.
The anticipated decline in gold export earnings will have significant implications for Zimbabwe’s GDP growth. The mining sector, including gold, platinum, and other minerals, is a major driver of the country’s economy, contributing over 12% to GDP. Any downturn in mineral prices will likely impact GDP growth, which has already been affected by high inflation rates and limited access to foreign currency.